CME's Volume 'Disaster' Due to Macro Woes: Exec

The decline in trading on CME
Group Inc's futures exchanges this year is more the
result of a sluggish economy and uncertainty over tax policy
rather than regulatory changes affecting the futures industry,
CME's executive chairman said on Thursday.

The decline in trading on CME
Group Inc's futures exchanges this year is more the
result of a sluggish economy and uncertainty over tax policy
rather than regulatory changes affecting the futures industry,
CME's executive chairman said on Thursday.

"Regulatory issues have a play in it - but this year was
setting up for a disaster in volumes from day one," CME's
Terrence Duffy said on a conference call discussing the
company's third-quarter results. Profit plunged in the quarter,
as trading fell 26 percent.

Regulators have been churning out new rules to implement
Wall Street reform legislation, and confusion over new
requirements has been cited as one factor hurting futures
industry volume.

Indeed, a regulatory "about face" on rules for the swaps
market confused markets and slammed CME's Clearport energy
clearing business for a two-week period in early October, Duffy
said on the call.

But volumes recovered once regulators exempted Clearport
energy swaps until the end of the year from counting toward
thresholds that trigger higher capital requirements for swaps
traders, Duffy said.

A sluggish economy and near-zero interest rates have hurt
trading, and Duffy said on Thursday that investors are keeping
cash on the sidelines as they wait for more clarity on the
economic outlook and fiscal policy next year.

"We will get clear skies and smoother waters as time goes
on," he said.